"Rate Lock" and other Ways to Get a Lower Interest Rate

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Freezing the Rate

When you are promised a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate over a certain number of days for your application process. This ensures that your interest rate can't get higher as you are going through the application process.

Although there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. You can get a longer period for your lock, but in choosing this option, will most likely have a higher interest rate than you would have with a shorter rate lock period

Additional Ways to Save on Interest

In addition to opting for the shorter lock period, there are more ways you can attain the best rate. A bigger down payment will get you a better interest rate, since you'll be starting out with more equity. You may opt to pay points to reduce your rate for the loan term, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You are paying more up front, but you will save money, especially if you keep the loan for the full term.

Mason McDuffie Mortgage can answer questions about rate lock periods & many others. Give us a call: (925) 271-7387.